Oil climbs on weaker dollar and supply disruptions
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Oil rose by more than $1 on Tuesday against a backdrop of supply disruptions and a sharp decline for the U.S. dollar.
Brent crude futures were up $1.59, or 2.04%, to $79.58 a barrel by 1438 GMT.
U.S. West Texas Intermediate (WTI) crude futures gained $1.35, or 1.85%, to $74.52.
The U.S. dollar index plunged on Tuesday after data showed that underlying U.S. consumer price inflation rose less than expected last month, reinforcing expectations that the Federal Reserve will slow the pace of its interest rate increases on Wednesday.
A weaker dollar makes oil cheaper for holders of other currencies, which can boost demand.
The market also derived support from uncertainty surrounding the restart of TC Energy Corp's Keystone Pipeline, which ships 620,000 barrels per day (bpd) of Canadian crude to the United States, after a rupture last week.
The closure has raised expectations that U.S. crude inventories will decline by 3.9 million barrels in the week to Dec. 9, according to a preliminary Reuters poll.
Reports from the American Petroleum Institute are due at 4.30 pm ET (2130 GMT) on Tuesday.
Further support followed "the threat of lower Russian output in response to the G7 price cap" said Craig Erlam, senior market analyst at OANDA.
Export volumes from Russia's Baltic and Black Sea ports are set to decline this month, while Black Sea CPC Blend exports are expected to fall in January.
Analysts, however, expect prices to remain volatile.
"Inflation is high, economic growth is stuttering, global recession is looming, oil consumption is under pressure and supply is unpredictable at best," said Tamas Varga, analyst at PVM Oil Associates.
OPEC on Tuesday trimmed its first-quarter absolute oil demand forecast and said the global economic slowdown is becoming evident.
Optimism over an oil demand recovery in China, the world's biggest crude importer, is waning after Chinese leaders reportedly delayed a key economic policy meeting amid surging COVID-19 infections.
Bank of America and Goldman Sachs on Monday said that a successful economic reopening in China, which had scrapped some of its strict COVID curbs over the past week, could further boost oil prices above $90 a barrel.
